Why Americans can’t afford buying homes explained: Americans are earning more, but still can’t afford homes – here’s why families now need more than $116,000 income to buy a house in the US
Why Are High Salaries Still Not Enough to Buy a House?
A recent Redfin report estimates that households now need an annual income of approximately $116,780 to afford the average home in the United States, as reported by CBS News. While that figure is down slightly from its mid-2025 peak of $122,000, it still remains well above the nation’s median household income.
The cost of a typical U.S. home now is close to $418,000, according to the National Association of Realtors. As a result, many middle-income households find themselves struggling financially as they try to enter the housing market.
How Much of Their Income Do Americans Spend on Housing?
Redfin found that a household with a national median income would need to spend about 40% of its earnings on an average-priced home, according to a CBS News report.
Financial experts generally recommend keeping mortgage payments close to 30 percent of annual income after making a 15 percent down payment. This gap illustrates why many recipients continue to struggle even as their paychecks slowly increase.
Why Do Economists Believe Housing Can Stay Affordable for Years?
Economists say affordability problems are unlikely to go away anytime soon.
“The affordability of buying a home in the United States continues,” said Nancy Vanden Houten, chief U.S. economist at Oxford Economics, “and we expect it to remain so for the next decade,” CBS News reported. Although home prices and mortgage rates have shown some signs of easing over the past six months, affordability remains elusive for millions of Americans.
San Francisco and Silicon Valley Continue to Lead Housing Costs
The affordability gap is especially acute in technology-driven markets.
In San Francisco, buyers now need an income of about $444,000 to buy a home, according to Redfin. The city’s median home sales price reached nearly $1.7 million in March.
Nearby San Jose also remains extremely expensive; households need about $426,000 a year to buy a home.
Redfin said housing inventory in San Francisco is struggling to keep up with demand linked to the AI boom and the steady arrival of tech workers to Silicon Valley, according to a CBS News report.
Midwestern Cities Where Buying a Home Is Still More Realistic
While many major U.S. cities remain expensive, some Midwestern markets continue to offer relatively affordable homeownership opportunities.
Detroit stood out as one of the few cities where the income required to buy a home (estimated at $56,219) falls below both the city median income and the national median income.
Other cities where earning around $88,000 could still be enough to buy a home include:
- Cleveland, Ohio
- Pittsburgh, Pennsylvania
- St. Louis, Missouri
- Philadelphia, Pennsylvania
- Cincinnati, Ohio
- Indianapolis, Indiana
- Warren, Michigan
Americans Are Increasingly Finding Homeownership to Be Harder Than It Used to Be
Many Americans believe buying a home today is significantly more difficult than in previous generations, as a February CBS News poll found that more than 8 in 10 Americans say owning a home is harder than it has been in the past.
“More than twice as many Americans live in the top 10 states with the highest home price-to-income ratios compared to the 10 states with the lowest price-to-income ratios, where it is more affordable to buy a home,” CBS News quoted Vanden Houten as saying.
FAQ
Why are Americans having trouble buying a home despite high wages?
Home prices and mortgage costs remain well above the median household income.
How much income does it take to buy the average US home?
Redfin estimates that households need about $116,780 annually.
